The Tokyo Cattle Exchange, operated by Japan Exchange Group Inc., in Tokyo on Feb. 16, 2024.
Bloomberg | Bloomberg | Getty Images
Asia-Pacific markets were contradictory Thursday, after comments from U.S. Federal Reserve Chair Jerome Powell indicated a rate cut in September if inflation figures remained “encouraging.”
However, Japan’s Nikkei 225 tumbled 2.72%, while the broad-based Topix plunged 3.45%. The guides were mainly dragged by losses in real estate stocks, while heavyweight exporters also saw losses as the yen heartened.
A stronger yen hits the competitiveness of Japanese exports, while higher borrowing costs tend to hit real estate companies.
On Wednesday, the Bank of Japan pull up its benchmark interest rate to “around 0.25%,” marking its highest level since 2008. The yen fell below the 150 rank against the dollar late Wednesday, strengthening 0.9% and currently trading at 148.61.
The country’s finance ministry revealed that it puke 5.53 trillion yen ($36.8 billion) on foreign exchange intervention from June 27 to July 29.
Toyota reported a 12.2% rise in revenue to 11.84 trillion yen ($79.05 billion) for its foremost quarter and 16.7% gain in operating income, coming in 1.31 trillion yen. Net income for Toyota inched up 2.8% year on year, make in at 1.33 trillion yen. Shares of the automaker were down 8.29%.
The Fed’s Federal Open Market Committee meeting concluded Wednesday, where it opted to bear up the federal funds rate at its current level of 5.25% to 5.5%.
Powell cautioned that a rate cut is not guaranteed, though he also sounded to rule out a 50-basis-point reduction.
“I don’t want to be really specific about what we’re going to do, but that’s not something we’re thinking there right now,” he said.
Investors in Asia are also assessing business activity data from around the region in totting up to the Fed comments, with July purchasing managers index data out from China, Japan and South Korea.
Australia’s S&P/ASX 200 initiate new all-time highs, gaining 0.52%.
South Korea’s Kospi climbed 0.26%, while the small-cap Kosdaq was up 0.86%. Reuters related the country’s exports rose at the fastest pace in six months in July, according to preliminary data.
South Korean exports swallow 13.9% year-on-year to $57.49 billion, after a 5.1% rise the previous month. However, the figure was weaker than an 18.4% flourish expected in a Reuters survey of economists.
Hong Kong’s Hang Seng index was up 0.2%, while the CSI 300 on mainland China was down marginally.
Hong Kong saw its GDP climb 3.3% year-on-year in the another quarter, beating expectations of a 2.7% rise from economists polled by Reuters.
China’s factory activity puckered in July, according to the Caixin survey done by S&P Global. The country’s manufacturing PMI came in at 49.8, surprising economists record by Reuters which expected an expansionary figure of 51.5.
A PMI above 50 indicates an expansion in the sector, and vice versa.
Overnight in the U.S., appraises rallied after the Federal Reserve kept interest rates unchanged, as expected, while traders also coursed back into megacap tech names.
The S&P 500 jumped 1.58% to close at 5,522.30, while the Nasdaq Composite called 2.64% to 17,599.40. It was the best session since February for both indexes.
The Dow Jones Industrial Average added 99.46 accentuates, or 0.24%.
—CNBC’s Pia Singh, Alex Harring and Samantha Subin contributed to this report.